Recurring Revenue Emergency Generator Power Supply Systems Business (Limitless Growth Potential, 33% CAGR)

Price: $1,550,000

Location: South Jersey

Industry: New Generator Sales & Installation, Emergency back-up power systems

Listing ID: Operation- Power supply


recurring revenue business model

Listing Description

Looking for an excellent business with recurring revenue, great margins, excellent cash flow, and Huge Growth potential. It’s all right here, complete in one package with this Generator business. The business has 4 revenue centers that come from new equipment sales, installation, maintenance contracts, & warranty services. This business has literally caught the rest of the competition napping! And are grabbing market share at an unprecedented clip. This business has grown at a compounded annual growth rate (CAGR) of 33% over the past 4 years. It focuses on residential and commercial generator sales and is the #1 Authorized Generac dealer  for sale in New Jersey.  With the abundance of catastrophic storms that cause more power outages than ever before. An increasing number of small businesses and households are buying high-end built-in  Generac generators, that provide emergency power supply immediately after the lights go out.  The best part is once a new unit has been sold, 9 times out of 10 the business just gained a customer for life. Because they offer annual maintenance contracts, which nearly every consumer that purchases a new unit buys. Buying a generator is no longer a discretionary purchase, it has become a necessity.  About 30% of sales currently being generated are from very durable recurring revenue annual maintenance contracts. As they continually focus on growing the generator maintenance side of the business, their revenue will shift into becoming even more recurring in nature than it is now. That’s Guaranteed Money in the Bank!  There is also another 10% in recurring revenues from warranty work. The high future sales visibility from recurring revenue contracts makes this business extremely attractive. The remaining 60% of revenue is broken down into- 40%  New product & parts sales and 20% from high margin installations.

There are also a Ton of other great value drivers such as:

-14% YOY industry growth in new generator sales

-Huge runway for Growth for in NJ

-A Loyal and Sticky customer base

– Recent Purchase  of 350+  Maintenance contracts that will be expiring and available for renewal over the next 18 months

-600+ Current Active Maintenance Contracts

-Elite Dealer with Generac which not easily obtainable and gives them much better purchasing power with increased margins.

– Excellent books & records from meticulous financial reporting that provide greater transparency

– Solid management team/ Highly qualified employee base

-Beautiful Office Space + Showroom (Possibility of purchasing the Real Estate along with the business. Real Estate not currently included in the sales price)

-Fully Licensed Electrician & Plumber on-board with business

-A widely diversified customer base

-Industry-leading gross & net  margins

-Widely Diversified Customer Base (Very Low Concentration)

-Ample Cash Flow

-A very professional organization with operations/procedures manuals, employee handbooks, & uniformed employees

-Excellent online reviews with content driven website SEO infrastructure

-Perfectly branded service vehicles, tools, and equipment all in a meticulously maintained top-notch well-kept condition. These definitely give the business the highly coveted “WOW Factor”

 

 

This outstanding business is being proudly being marketed & sold exclusively by Business Acquisition Experts “BAE”. BAE and our Business Brokers “only sell businesses that we would buy ourselves.”

To see more of our exclusive business listings click here:  https://acquisitionspro.com/businesses-for-sale-2/

Listing Details

Total Sales: $1,575,458

Cash Flow: $515,620

Accounts Receivable: $93,836

FFE: $200,003

Inventory: $150,000

Real Estate: $950,000

Lender Pre-Qualified?: Yes

Terms and Conditions?:

Seller is going to include 30 days worth of service/maintenance parts & supplies with the purchase of the business free of charge.

Reason For Sale:

Retirement/ Business Owner Fatigue

Training & Support:

Full 30-day training & on-going support. Seller wants to ensure the success of the new owner.

Operation

Year Established: 2013

Year of Last Acquisition: Recently acquired 360+ expiring maintenance contracts from a retiring competitor in mid-2018. Huge Growth Opportunity to add more recurring revenue to the top and bottom line.

Days & Hours of Operation: 8 AM - 4 PM Monday, Tuesday, Thursday and Friday, Wednesday 8 AM -6 PM & Saturday 8 AM -12 PM 9 AM -6:00 PM Wednesdays 8 AM -12:00 PM Saturdays

Owner Hours Per Week: 45

Employees: 10

Managers: 2

Location

Lease Option: 10 Years

Monthly Rent: 3,100

Type of Location: Commercial Stand Alone with Residential Second Floor. Beautiful landscaped facility that has real "curb appeal". Efficient and organized office + showroom Second leased location located in North NJ

Relocatable?: Yes

Summary

Historical Summary:

Founded in 2013, this business has blown up from the start. There is a ton of pent-up demand from the marketplace for emergency power supply systems. It is evident from the consistent sales growth that this great business has achieved YOYOY. The current owner/founder kind of stumbled into the business of selling generators. He purchased and installed one for his home. While completing the install for his top of the line Generac backup generator, almost every neighbor came by to marvel the beauty and practicality of his system. Within one weeks time, he had  6 neighbors that wanted the same system. And so he began the business, its been non-stop growth ever since.

Owner Qualifications:

Electrical, Plumbing, and/or Mechanical skills are a definite plus. But not totally required because this business has the staff to facilitate all jobs.

Competition:

There are a few trying to compete, but this business is “hands-down” The Industry Leader. Even if 10 more businesses opened up just like this one. They most likely would not have any effect on sales or margins for this business. Simply because there is more demand then there are companies that offer these products & supply their services.

Potential Growth:

The owner just recently bought the right to renew 360 expiring maintenance contracts, over the next 18 months. He acquired them from another competitor that was shutting his business down for retirement. So not only is there one competitor less, there is a HUGE growth potential to add a significant amount of annually recurring sales. Given the huge growth potential with the annual maintenance contracts, this business presents a Phenomenal opportunity for a buyer to add some serious value to the business in the coming years. Perfect platform to buy, build, and exit for double in 3-5 years for a higher valuation through multiple expansion. For more insight about how recurring revenue impacts the enterprise value of a business. Click here for a great article from a highly credible source.

On top of the maintenance side, there is also substantial upside growth in what’s known as “Push & Pulls”. This is basically upselling new generators to owners of older model generators that are ending their life cycle and are no longer under warranty. Every time this business gets a service call from a residential homeowner with an aging unit, a chance at selling a brand new unit presents itself.  This business has seen YOY  sales growth for push & pulls and it is a fact that this trend will continue to rise for years to come. Older model Generacs used to only come with 3 to 5-year warranties. Now they offer 10-year warranties. For most consumers, it just makes sense to buy a newer unit instead of wasting money on costly repairs. Homeowners in this demographic rarely spend money on costly repairs for their vehicles. The just buy or lease new ones with warranties. The same logic applies to generators.

Last but not least, there is also a huge upside for installations of new units. This would require a small capex investment for a new service vehicle and a couple of techs. Installs have the highest margins out of all 4 of this businesses revenue centers. The current owner has been turning down installation work left & right. Because he is simply to busy and doesn’t have the time or manpower to take them on. But the demand is there.

As you can see, there is UNLIMITED growth potential across the board.

Financing/Terms:

Negotiable